Santa Ana, California - The officers of a company that marketed and sold Nobetes, a pill they claimed treats diabetes, have settled a Federal Trade Commission complaint alleging that the advertising claims for the product are false or unsubstantiated.
The order settling the FTC’s complaint prohibits the company and its officers from undertaking future deceptive practices, including making unsubstantiated health claims, misleading consumers about the terms of “free trial” offers, billing consumers without their consent, and other practices related to the use of “expert” endorsements and consumer testimonials. In addition, the order requires them to pay $182,000.
What the FTC Did to Protect Consumers
According to the Commission’s complaint, between 2015 and 2018, Nobetes Corporation, along with its two officers Marvin Silver and Jeffrey Fleitman, advertised and sold Nobetes, a pill containing a concoction of vitamins, minerals, and plant extracts. The price of a 30-tablet bottle ranged from $29.95, plus shipping and handling, to $50.60.
The defendants advertised Nobetes on television, radio, Facebook, and YouTube. One of their television ads began with an announcer asking, “Is your diabetes out of control? Are your numbers ranging from 150 to 550 or more?…Are your blood sugar numbers dangerously high?” The announcer then stated, “You need to try the all-natural supplement called Nobetes … Just listen to what other diabetics are saying,” and introduced consumer testimonials reporting large reductions in blood sugar levels and, in some instances, asserting that they were able to reduce their use of insulin.
Another television ad for Nobetes featured Mitch Darnell, a purported expert, who stated that Nobetes “helps control blood sugar within normal levels” and contains 35 supplements that can “fill the nutritional shortages that diabetes causes.” He concluded by saying, “Diabetics, this is the miracle product you’ve been waiting for, Nobetes.”
The FTC’s complaint alleges the claims that Nobetes treats diabetes, keeps blood sugar within normal levels, and reduces or eliminates the need for medications such as insulin, are false or unsubstantiated. According to the complaint, the defendants continued to make diabetes benefit claims even after the U.S. Food and Drug Administration and the FTC warned them, in 2016, that they needed reliable scientific evidence, including, when appropriate, well-controlled human clinical studies, to support health claims for Nobetes.
The complaint also alleges that while the promotional materials implied that Mitch Darnell is a qualified scientific or medical expert, he is actually an actor who was paid to promote Nobetes. The defendants allegedly also failed to disclose they provided many of the consumer endorsers with free product.
In addition, the complaint alleges that the defendants misused consumers’ credit card information. Two of the television ads advised consumers that they could get a “free” bottle of Nobetes just by paying $6.95 for shipping and handling. When consumers called to take advantage of this offer, they were asked to provide their credit card information. The defendants charged them $6.95 for the trial offer—but in many instances, the defendants used this credit card information again, 30 days later, to charge $50.60 for the shipment of another bottle of Nobetes. The complaint alleges that these practices are deceptive and unfair.
What the Settlement Means
The proposed court order settling the FTC’s complaint bans the defendants from advertising or selling Nobetes or any other diabetes product. It prohibits them from making health-related claims, including claims that the use of a product will prevent, mitigate, or cure any disease, unless the claim is not misleading and is supported by competent and reliable scientific evidence. The order also prohibits the defendants from making misrepresentations about any endorser and requires the defendants to clearly disclose any unexpected material connection between an endorser and the defendants.
The order contains provisions to address the defendants’ billing practices. It prohibits the defendants from a making a range of misrepresentations related to “free trial” offers and “negative option” sales features. It further requires the defendants to provide consumers with relevant information about recurring shipment programs (including the cost and frequency of future shipments), to get consumers’ express consent before enrolling them in such a program, and to provide consumers with an easy way to cancel orders.
Finally, the order requires the defendants to pay a judgment of $182,000, which may be used to provide refunds to consumers.
The Commission vote authorizing the staff to file the complaint and proposed consent order was 5-0. The complaint was filed in the U.S. District Court for the Central District of California.